Binance’s explosive growth led to compliance failures
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“As part of the settlement, CZ cannot be involved in the day-to-day running of the company’s operations,” Richard Teng explains. Despite that, the incumbent CEO of Binance cuts the figure of a man reveling in the challenges ahead. Speaking to Cointelegraph just two weeks after taking over from outgoing CEO Changpeng ‘CZ’ Zhao, Teng seems to be relishing being at the helm of the world’s largest cryptocurrency exchange: “I’m taking the baton and pushing ahead with our growth agenda while working very closely with global regulators.” Teng believes that the “overcast” conditions clouding Binance in recent months are lifting following its staggering $4.3 billion settlement with the United States Justice Department relating to a raft of violations of U.S. regulations and sanctions programs. $4.3B settlement a result of early gaps in compliance The exchange has paid dearly for mistakes made during its meteoric growth from 2017 onwards. Teng recalls how Zhao built Binance from a team of six people to a global operation consisting of thousands of employees that serves a user base estimated to be more than 166 million. “In those very early days while we were building up the company, there were gaps in terms of compliance. That resulted in all these breaches and mistakes, but these are historical issues,” Teng says. The shortcomings of its early compliance regime have led to the largest crypto-related settlement in U.S. history. However, Teng contends the company has always ensured its user funds, security, and safety have remained “sacrosanct.” “U.S. agencies have scrutinized our operations in great detail for us to reach this settlement, and there’s no allegation of any misappropriation of user funds,” he adds. Binance’s obligations to U.S. authorities Binance is now left to shoulder the ongoing cost and scrutiny that its settlement with U.S. authorities involves. This includes…
Filed under: News - @ December 3, 2023 6:02 pm